Mobilizing Climate Finance

Updated December 2014

Mobilizing public and private climate finance is a major priority for the United States. In December 2009, President Obama and heads of state from around the world met in Copenhagen at the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). The resulting Copenhagen Accord secured, for the first time, an agreement that all major economies, developed and developing, will take meaningful steps to reduce their emissions. In addition, the Copenhagen Accord contained a number of provisions to support developing countries, particularly the poorest and most vulnerable, in their transition to low-carbon, climate-resilient economies:

A collective commitment by developed countries to provide new and additional resources, including investments through international institutions, approaching USD $30 billion for the period 2010–2012

Commitment by developed countries to the goal of mobilizing jointly USD $100 billion per year by 2020 from public and private sources, to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation

A call to establish the Green Climate Fund, a new multilateral trust fund designed to foster low emission and climate resilient development and catalyze private sector investment.

Meeting the Fast Start Finance Commitment

Developed countries fulfilled the fast start finance commitment by providing approximately $33 billion in new and additional public resources over 2010-2012 to facilitate robust climate action in developing countries. U.S. public climate finance over this period totaled $7.5 billion, including $4.7 billion in congressionally appropriated assistance, $2 billion in development finance, and $750 million in export credit. The annual average over this period is more than six times greater than annual U.S. climate finance provided before 2009.

Mobilizing $100 billion by 2020

The United States and other countries are now working to collectively mobilize $100 billion in climate finance per year by 2020, from a wide variety of public and private sources, to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation. In 2014, U.S. public climate finance was $2.7 billion, the same as in 2013 and a $400 million increase from 2012.

Note: Included in these totals are (1) activities that were conceived and funded specifically to achieve climate-related objectives, and (2) activities that provide climate co-benefits (for example, biodiversity and food security activities). In cases where only a fraction of a program's budget supports climate benefits, only that relevant fraction has been counted, not the entire program budget. Congressionally appropriated grant-based assistance is channeled through USAID, State, Treasury, MCC, and other U.S. agencies; development finance is channeled through the Overseas Private Investment Corporation (OPIC); export credit is channeled through the Export-Import Bank. These figures do not include U.S. contributions to the ordinary capital resources of Multilateral Development Banks, a portion of which are used to finance climate-specific activities.

Establishing the Green Climate Fund

In November, 2014, President Obama announced the intention of the United States to contribute $3 billion to the Green Climate Fund (GCF), reflecting the U.S. commitment to reduce carbon pollution and strengthen resilience in developing countries, especially the poorest and most vulnerable. By financing investments that help countries reduce carbon pollution and strengthen resilience to climate change, the GCF will help leverage public and private finance to avoid some of the most catastrophic risks of climate change. By reducing those risks, the GCF will help promote smart, sustainable long-term economic growth and preserve stability and security in fragile regions of strategic importance to the United States.

The U.S. contribution to the GCF builds on a history of U.S. leadership to support climate action. In 2008, the Bush Administration pledged $2 billion to the Climate Investment Funds, which were established as a transitional measure to finance efforts to help developing countries address climate change. The U.S. pledge to the GCF demonstrates a continuation of the bipartisan resolve to help developing nations reduce their own emissions as well as to help the most vulnerable cope with the impacts of climate change. The GCF will also help spur global markets in clean energy technologies, creating opportunities for U.S. entrepreneurs and manufacturers who are leading the way to a low-carbon future.

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